BACK TO
THE BRICKS.
DOWN TO
BREAKEVEN.

What LiveWire costs Harley-Davidson, what the new plan leaves out, and what 2027 looks like on the company's own numbers.

Part 1 · The arithmetic

Harley-Davidson's new CEO, on the call that replaced the old five-year strategy:

Fourteen words. The parent company's verdict on Hardwire, on LiveWire, and on five years of product decisions.

Harley-Davidson, Inc., 2026, on its own guidance:

It made $779 million in 2023. Roughly breakeven is the floor the new strategy is being measured from.

Half the motorcycles.

267,999 in 2014. 132,535 in 2025. Down 51%, and down every year since 2021. U.S. retail: down 52%. Shipments: down 54%.

• H1 2026 consolidated operating income was $99.5M, so the full-year guide implies a second-half loss. Q4 is seasonally weak (HDMC lost $260M in Q4 2025), and management has beaten its own ranges twice this year. The guidance may be conservative.
• The sum is checked. Segments add to the consolidated line in 2025 and 2024 to the decimal. No corporate eliminations sit between them.

It is still the number they chose to publish.

Part 2: where the 2025 profit actually came from, and why it does not happen twice.

Full brief: 16 sections in six parts, every figure linked to its filing, open items and corrections published.
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THE
SALE.

In 2025 the motor company lost money and the subsidiary lost more. The year was profitable because the finance company sold its loan book.

Part 2 · The sale

• About $6 billion of existing retail loan receivables, at a premium to par.
• 9.8% of HDFS: 4.9% each to KKR and PIMCO, at an agreed $1.8B valuation.
• A five-year forward-flow agreement: two-thirds of future originations, sold.
• A $1.0 billion dividend from HDFS up to the parent in Q4 2025.
• Credit-loss provision swung from a $247M expense to a $191M credit as reserves on the sold loans were released.

Announced by the departing CEO, three months before he left.

Seven years of HDFS earnings, paid up front. Not a bad trade if the cash earns more than HDFS did. So far: a $200M buyback at ~$26.50, and $1.9B sitting on a balance sheet guided to breakeven.

This is why 2025 EPS was $2.78 and not something near zero.

And why the 2026 guidance looks like a cliff. It is not a cliff. It is the ground. The $350M HDMC EBITDA target now has to carry the enterprise in a way it never had to before the sale.

Part 3: what LiveWire costs the parent, and the date it stops being a line item and becomes a decision.

Full brief: 16 sections in six parts, every figure linked to its filing, open items and corrections published.
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THE
SUBSIDIARY.

$422 million of LiveWire losses consolidated into Harley-Davidson since 2022. Cash to May 2027. A note due in December.

Part 3 · The subsidiary

0.6% of revenue. A third of the drag.

Every dollar LiveWire loses lands in Harley-Davidson's operating income. Only the ~11% belonging to the public minority comes back out, below the line. H-D shareholders bear ~89%.

February 2024

A $100M convertible loan. If LiveWire could not repay, Harley-Davidson would take equity. A parent's instrument. Never drawn.

November 2025

Amended and restated at $75M. Conversion feature removed. Security interest over substantially all assets added. SOFR + 4%, compounding, all due 15 December 2027. First $10M of any equity raised goes to the lender. Drawn in full 15 December 2025.

A convertible says: if this fails, we own it. A secured loan says: if this fails, we get paid first.

H-D has stated no intention to fund, acquire, divest or wind down LiveWire. None is asserted here.

No 2026 statement from Starrs or CFO Root uses "strategic alternatives," "divestiture" or "wind-down." Back to the Bricks does not mention LiveWire outside its forward-looking factors. LiveWire's 10-Q says it will pursue financing "during the third quarter of 2026." That quarter ends in three weeks.

Part 4: what Back to the Bricks actually commits to, what Hardwire delivered, and the one motorcycle carrying the growth target.

Full brief: 16 sections in six parts, every figure linked to its filing, open items and corrections published.
contactpatchadvisory.com/groundtruth/02

THE
BRICKS.

Five pillars, six targets, one dated number, and a 2027 that lands everything at once: the EBITDA target, the Sportster, and the LiveWire note.

Part 4 · The bricks

Not in it: a revenue figure, EPS, free cash flow, Sportster volume, a capital-return commitment, or any LiveWire target.

Every quantified target missed. Shareholders withheld over 48% from the CEO in May 2025; he and two directors were gone within a year.

One motorcycle carries the growth target.

Starrs: the Sportster market "as recently as five, six years ago… was 35,000–40,000+ on a global basis." Recover a third of that and the 883 alone delivers two years of the plan's growth.

Raymond James, same call: "there's a reason why Sportster was discontinued, right? It was hard to make money." Starrs: the cost is now "extremely comfortable against the expected MSRP."

• LiveWire did not break Harley-Davidson. A $75M loss does not take a company from $779M to zero. Touring, tariffs, a 12% retail decline and the HDFS sale did that. The electric bet is the flattering villain.
• LiveWire is exactly what the new Harley cannot afford. When the motor company is guided to make $10–50M, a $70–80M loss is the difference between a profit and a loss. The plan solves this by not counting it.
• The decision has a date. Cash to May 2027. Note due December 2027. EBITDA target: 2027. Nobody has said what the decision is.

Which brick is LiveWire under?

Back to the Bricks has five pillars, six targets and a two-year clock. It is scored on the motor company. Harley-Davidson, Inc. is not the motor company. It is HDMC, plus a finance company sold forward, minus a subsidiary guided to lose more than HDMC makes, with a note due in the plan's own target year.

Full brief: 16 sections in six parts, every source linked, open items and corrections published.
contactpatchadvisory.com/groundtruth/02